The traditional manner of paying a merchant using a payment account (e.g., a credit card) is inefficient and costly to both merchants and consumers. For instance, when a consumer wishes to pay for an item at a merchant's place of business by using a credit card, the consumer typically runs the credit card through a card reader at the merchant's point-of-sale (POS) terminal. The merchant's POS terminal submits a transaction request to an acquirer, who authorizes or declines the transaction. The merchant typically stores all of the day's authorized transactions in a batch, and sends the batch to the acquirer at the end of the day to receive payment. The acquirer sends the batch to a card network (e.g., VISA or MasterCard), which distributes the transactions to credit card issuers. The credit card issuers transfer the transaction amounts through the card network to the acquirer, who in turn pays the merchant.
Through the credit card transaction process, the acquirer, the card network and the credit card issuers may charge fees (e.g., interchange fees, assessment fees, or discount fees) for executing the transactions. The merchant ultimately receives a payment that has these fees subtracted from the corresponding total transaction amounts. This places a financial burden on the merchant for accepting credit card payments. The merchant has no ability to reduce the fees because he has little control on how the credit card transactions are routed and executed. The merchant therefore typically transfers at least some of the financial burden to the consumer by factoring the fees into the product price.